Myanmar

3 Chapter M&A

• Chapter

  •  1 Chapter Basic Knowledge

    1.1 Basic Knowledge

    1.2 Reference

     2 Chapter Incorporation

    2.1 Characteristics of business base

    2.2 Establish a business base

    2.3 Company liquidation and withdrawal

    2.4 References

     3 Chapter M&A

    3.1 M&A trend in Myanmar

    3.2 Law and Regulation on M&A

     4 Chapter Accounting

    4.1 Accounting systems

    4.2 Accounting standards [MAS]

    4.3 Disclosure systems

    4.4 Audit systems

     5 Chapter Tax Laws

    5.1 Overview

    5.2 Tax related to personal income

    5.3 Corporation income

    5.4 Commercial tax

    5.5 Tariff

    5.6 Other national taxes

    5.7 Withholding tax system

     6 Chapter Labor

    6.1 Working Environment

    6.2 Labor Law

    6.3 Social security system

    6.4 Points to keep in mind when Japanese people are resided

• 3.1 M&A trend in Myanmar

  • M&A trend in Myanmar

    Along with the transition to democratization in 2011, economic activities became more active in Myanmar. However, there is still regulation on foreign corporations.
    Foreign corporation can’t acquire Myanmar internal corporation, and business transfer is only method to acquisition.
    There is industry regulation on foreign corporation and it will deal as foreign corporation if Myanmar internal corporation is added foreign capital eve if the capital is only slightly.
     
• 3.2 Law and Regulation on M&A

  • Law and Regulation on M&A

    Foreign investment law, company law, and Securities and Exchange Act are related regulations to M&A.

     

    Investment regulations

    Foreign investment law is under jurisdiction of MIC. Capital is decided by MIC through check the business and get permission of government.

    It is not permitted that foreigner or foreign corporation have estate. However, they can receive long term lease from related ministries and agencies. State-owned land is possible to use. The lease term is maximum 50 years, and can update 10 years extension for two times.

    Local employment as skilled worker or manager proportion has to be at least 25% within 2 years after establishing the company. Within next 2 years it needs to be at least 50% and within coming next 2 years it has to be at least 75%. Other labor such as not required high skill has to be only local in principle.

    There are two acts related on foreign exchange law such as Central Bank Act, 1990 and Foreign Exchange Control Act, 1947. There is limited to open a bank account of foreign currency. Both of national bank and public bank can hold foreign currency now. There is no limited to open an account for local currency. Remittance to foreign countries is possible if you got permission from MIC.

    In 2014, a new notification [MIC Notification No.49, 50/ 2014] was made public. On this notification, there is a tendency to release for foreign capital.

     

    Investment incentive

    Corporation which apply for preferential treatment to MIC and established based on foreign investment law is target of preferential treatment. Under the preferential, 5 years free income tax is recognized.

     

    Company law

    There are some regulations related to M&A such as stock transfer, stock allocation and right to purchase shares for stockholders. There is no regulation for organization restructuring, so the method of M&A is limited to stock transfer and business transfer.

    When foreign corporation acquisition Myanmar corporation by stock transfer, the attribute of the target company affects to whether shares can be acquired or not. There is no regulation for business transfer on company law, transfer procedure is decided at bylaws of transfer side.

     

     Securities and Exchange Act

    Securities and exchange act is enacted in 2013 and the regulation contents are below.

    ・Securities and Exchange Commission to monitor stock exchanges and securities company

    ・Securities company and license

    ・Procedures and requirements for issuance of securities

    ・Stock exchanges and over-the-counter market

    ・Securities custody settlement

    ・Prohibited act and Penal provision